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Whale Oil blogger Cameron Slater this afternoon confirmed he had been subpoena-ed by Inspector General of Intelligence and Security Ms Gwyn to appear at a September 11 hearing into the release of information to him by domestic spying agency the Security and Intelligence Service (SIS) in 2011 which he used to embarrass then Opposition Leader Phil Goff.
Nicky Hager's book alleges Slater was instructed by figures in Mr Key's office about what to ask for, what he would be sent in response and that the material would be released to him quickly.
Mr Slater confirmed both that he had been instructed to appear at the hearing, and that he was taking legal advice over what information including emails, Facebook messages and other communications he may be required to provide to Ms Gwyn's inquiry.
The Herald understands the hearing will be held in Wellington, but will not be open to the public.
'Something rotten in the heart of the Government'
Campaigning at Avondale markets this morning, Labour leader David Cunliffe said he took no joy in the developments yesterday which saw Judith Collins resign from her ministerial posts.
"The allegation that a major company would be involved with the Whale Oil website and the Minister of Justice to attack a regulator is absolutely beyond the pale," he said.
"This is not the type of government New Zealanders deserve and it will change under a Labour Government that I lead."
Allegations that bloggers may have been paid to launch attacks against the Serious Fraud Office and the Financial Markets Authority were not yet proven, which was why a full inquiry was needed, Mr Cunliffe said.
"But if true they would show corruption which goes to the heart of the government.
"If proven this would be a very, very serious matter.
"The minister would be completely, completely out of line with her duties to the Crown to preserve the regulatory process, let alone by interfering - if true - to undermine her own chief executive on behalf of a commercial interest, this doesn't get much worse."
Mr Cunliffe described the latest allegations in the Dirty Politics saga as "as bad as politics gets".
"It's got to be cleaned up. New Zealanders deserve better."
The saga wasn't limited to Judith Collins, he said.
"This is John Key's network, this is not just about Judith Collins.
"This is a much bigger, deeper issue, something is rotten in the heart of the National Government.
"New Zealanders deserve a better government than this, they have three weeks to exert the power of the ballot box to clean up this mess.
"The Prime Minster must now come out and say what he thinks of the dirty tricks machine that was running out of his own office. That is something that he must do for New Zealanders, this is not just about Judith Collins."
'I'm going to deal with that very firmly'
Mr Key stopped for a few questions this morning while campaigning at St Lukes, saying he believed New Zealanders would recognise he had done the right thing by accepting Collins' resignation and calling an inquiry.
"Where there's an issue that's been brought to my attention, as there was on Friday, I think New Zealanders can see I'm going to deal with that very firmly."
He hoped it would put the Dirty Politics book and its fallout behind him. He continued to try to downplay the credibility of the book.
"The book, maybe it should be called Desperate Distractions really."
He did not believe it had damaged his reputation as a leader because he had dealt with it fairly and quickly.
"In the case of Judith Collins I accept there needs to be a full inquiry there because some of the allegations, or at least the statement Mr Slater made in his email is a serious one."
However, he said that others were implicated in the email, including Herald journalists.
"That media outlet has strongly said those statements made are wrong. And I think that will demonstrate again to New Zealanders that just because something is written in an email by one person, in this case, the blogger [Mr Slater], that's characterisation of what that person thinks and doesn't necessarily reflect the truth, because it's been utterly refuted by the media outlet."